SN Power signs PNA with IBN

KATHMANDU, April 21: The Investment Board of Nepal (IBN) has signed project negotiation agreement (PNA) with SN Power, a Norwegian power developer engaged in development of 650MW Tamakoshi hydropower project. SN Power is the first company to ink PNA, although the IBN has asked all hydro project developers to sign such agreement.

“GMR and Sutlej Jal Vidyut Nigam, two Indian infrastructure developers, have not signed PNA so far,” a source privy to the issue told Republica. The IBN had previously asked all the three developers–GMR, Sutlej and SN Power–to sign the PNA.

PNA sets a standard timeframe to complete project development agreement (PDA) negotiation for hydropower projects above 500 MW. According to the PNA document, developers and the government should sign PDA within one and half years of beginning PDA negotiations.

The GMR is engaged in development of 900 MW Upper Karnali and 600 MW Marsyangdi hydropower projects. Sutlej is working on developing 900 MW Arun III hydropower project.

“Sutlej still has time to sign PNA. But GMR has failed to sign PNA for Marsyangdi hydro project within deadline,” the source revealed. “GMR, however, has not declined to sign the document. It has said it is preparing to sign the agreement.”

The IBN, a high-level government entity that was formed more than one and half years ago to facilitate development of large-scale infrastructure projects, last week formed a PDA negotiation team.

“The IBN has communicated with developers to start PDA negotiations by the end of May,” the source said. “The IBN is hoping that GMR would sign PNA before that.”
According to the PNA template, PDA negotiation with hydro project developers would be automatically terminated if PDA could not be completed within one and half years of commencement of PDA negotiations.

It is said PNA will end the proclivity to lingering PDA negotiations for mega hydropower projects.

According to the source, the IBN developed PNA template through technical assistance of the Centre for Inclusive Growth (CIG), an organization that focuses on policy dialogues in the country and is funded by the Department for International Development (DFID) of the British government.

A high-ranking IBN official said: “The concept of PNA was coined to pass the ownership of the project to developers.”